Avianca Holdings reported profit of US$72.2 million

Between January and March 2016, Avianca Holdings S.A. reported operating revenues of USD1.0 billion and an operating profit (EBIT1 ) of US$72.2 million, achieving an operating margin of 7.2%, 106 bps higher than the margin reported for the same quarter of 2015. Adjusted net income was USD21.4 million with an adjusted net income margin of 2.1%.

These results were mainly driven by a 10.9% reduction in total operating costs1 as the Company continued to further capture benefits from lower oil prices, which in hand with the cost saving initiatives have led to a leaner cost structure. The latter was partially offset by a 9.9% decline in total revenues as FX depreciation in the markets where we operate continued to affect demand, which consequently caused a yield dilution of 19.0%. Furthermore Cargo and Other revenues dropped 1.6%. The latter as a result of a contraction of inbound cargo traffic and lower revenues from other cargo-related revenues and services.

Cost per available seat kilometer (CASK1) decreased 18.3% to 8.11 cents in 1Q 2016, compared to 9.93 cents in 1Q 2015. This figure although being mainly driven by lower jet fuel prices, also reflects the results of the cost optimization plan. As such CASK ex-fuel1 declined 10.1% to 6.67 cents as the cost control initiatives along with the actions taken to optimize our network continue to yield efficiencies. Moreover an additional positive effect was the FX depreciation on our Colombian peso denominated costs.

Between January and March 2016, earnings before interest, taxes, depreciation, amortization and rent, EBITDAR1, was USD214.9 million, while the EBITDAR1 margin reached 21.4%, a 300 bps increase when compared to the same quarter of 2015.

Capacity, measured in ASKs (available seat kilometers), increased 9.0% during 1Q 2016, mostly due to the annualized effect of the international capacity added during 2015, such as the new service from Bogota to Los Angeles, and incremental frequencies to London and Madrid. Furthermore, passenger traffic, measured in RPKs (revenue passenger kilometers), grew 8.7%, reaching a consolidated load factor of 78.8%.

In accordance with the Company’s fleet plan, between January and March 2016, the Company phased-out one Airbus A320 and two A319. Consequently, Avianca Holdings S.A. and its subsidiaries ended the quarter with a consolidated operating fleet of 177 aircraft.

The financial and operating information is in millions of US Dollars, except when otherwise indicated, and according to International Financial Reporting Standards (IFRS).

Avianca Holdings S.A (NYSE: AVH) (BVC:PFAVH)* includes the following airlines: Aerovías del Continente Americano S.A. Avianca (Avianca), Tampa Cargo S.A incorporated in Colombia, Aerolíneas Galápagos S.A Aerogal incorporated in Ecuador, and the companies of the TACA Group: TACA Internacional Airlines S.A, incorporated in El Salvador; Líneas Aéreas Costarricenses S.A, LACSA, incorporated in Costa Rica, Transmerican Airlines S.A. incorporated in Peru, Servicios Aéreos Nacionales S.A, SANSA incorporated in Costa Rica, Aerotaxis La Costeña S.A, incorporated in Nicaragua and Isleña de Inversiones C.A. de C.V. ISLEÑA incorporated in Honduras and Aviateca S.A. incorporated in Guatemala.